Manufacturing SMEs are a major source of energy and material consumption, wastewater, solid waste, and air emissions, so strengthening their environmental management is central to curbing industrial pollution and protecting surrounding ecosystems. In transition economies, SMEs remain slow to adopt environmental management accounting (EMA), while the effect of EMA on eco-innovation is underexplored. Drawing on institutional theory, the natural-resource-based view, and the dynamic capabilities perspective, this study tests a model in which three forms of institutional pressure, namely coercive, normative, and mimetic, drive EMA adoption, and EMA in turn drives three forms of eco-innovation: eco-product innovation (EPI), eco-process innovation (EPrI), and eco-organizational innovation (EOI). Survey data from 247 manufacturing SMEs in Ho Chi Minh City, Vietnam, were analyzed using partial least squares structural equation modeling (PLS-SEM) in SmartPLS 4. All six hypotheses were supported. Coercive pressure exerted the strongest effect on EMA, followed by normative pressure and mimetic pressure. EMA positively affected all three forms of eco-innovation, most strongly organizational innovation, followed by process and product innovation. The model explained 30.7% of the variance in EMA, 21.6% in EOI, 16.9% in EPrI, and 7.5% in EPI. The finding that EMA most strongly promotes organizational eco-innovation provides a new empirical nuance and contributes evidence from an under-researched transition economy. Beyond its accounting implications, the study shows that by improving firms' capacity to monitor material, energy, water, and waste flows, EMA-enabled eco-innovation offers a practical mechanism for reducing pollutant discharge and mitigating the environmental degradation associated with manufacturing, thereby advancing environmental sustainability, resource conservation, and ecosystem protection in transition economies.
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